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8/17/10 Midevening Report: Market gets higher thanks to POT

|Includes:Home Depot, Inc. (HD), JOEZ, KITD, WMT

The market was up huge today, figuratively poking bears in the eye as if they were watching a new Japanese 3D movie, thanks largely to earnings from WMT and HD, a take out bid piped in for POT, and a continued disbelief in macro economic news which has been trending worse than Nouriel Roubini's Q score at a meeting of the Fed.  PPI rose for the first time in 4 months due to higher prices for food, consumer goods, and Playboy thanks to Kelly Brook's very NSFW appearance.  The .2% rise was inline with analyst guesses which makes analysts 1 for the last millenium and shows that inflation is currently in check.  In other macro news, industrial production beat analyst guesses by rising 1% as factories churned out more computers, appliances, automobiles and shit most people can no longer afford.  Of course the number released by the Fed is about as believable as Enron's accounting or OJ's alibi (umm, he had an alibi, right?) since as part of their "hold the shock and hope for no awe" strategy, they revised last week's number downwards from a .1% increase to a .1% decline.  Given that, Money McBags predicts next month the Fed will revise this number down to something less than 1% but no one will care because backwards looking revisions are never as fun as false hope (or backwards looking visions).


Finally in US macro news, housing starts were up 1.7% but slightly below analyst guesses, building permits dropped by 3.1%, and last months 5% housing start decline was downwardly revised to an 8.7%decline  which was less surprising than learning most smurfs suffer from blue balls (and not just because their skin is blue, but because there is only one fucking female smurf).  Home builder sentiment is now at a 17 month low as they wait for new government home buyer tax credits, a full nationalization of the entire mortgage finance industry per Bil Gross' suggestion (which just happens to help his bond book, so weird why he would want that), or the economy magically recovering (and Money McBags bets that will be the the third of those three things to happen).


Internationally, Germany's Zew monthly confidence index fell after both a huge Q2 that is not likely replicable and after remembering it had failed to use protection when sleeping with Nadja Benaissa.  That said, the indicator still predicts modest growth in the second half of the year thanks to Germany's surging exports led by machinery, automobiles, and Sonya Kraus calendars.


The big news of the day though was that BHP put in a $38B take out offer for POT making it potentially the biggest pot sale since Snoop Dogg got his last royalty check.  The bid of $130...READ MORE.....

Disclosure: Long KITD
Stocks: HD, WMT, KITD, JOEZ